Where AI Job Cuts Are Happening First

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AI isn’t replacing U.S. workers en masse—yet. According to MIT's State of AI in Business 2025 report, the first disruption is hitting outsourced and offshore jobs, not internal staff.

• Short vs. long term: Only ~3% of jobs could be replaced by AI in the near term, but nearly 27% are at long-term risk.
• Who’s hit first: Business process outsourcing (BPO) and external agencies, companies are cutting vendor contracts instead of laying off full-time employees.
• Cost savings: One company saved $8M a year by replacing BPO contracts with an $8K AI tool. Across firms studied, AI cut $2M–$10M annually in outsourcing costs.
• Industries most impacted now: Tech and media, where over 80% of executives expect reduced hiring in the next two years.
• AI budgets: 50% of AI spend currently goes to sales and marketing tools, even though back-office automations deliver higher ROI.

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But:

• 95% of companies investing in generative AI report zero measurable ROI so far.
• Yet firms are still seeing productivity boosts suggesting AI could be a “Goldilocks scenario” higher earnings without mass layoffs.